Zimmer Biomet Holdings, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Zimmer Biomet Holdings, Inc. managers to do a situational analysis of the organization . It is a handy technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Zimmer Biomet Holdings, Inc. is facing in its current business environment.

The Zimmer Biomet Holdings, Inc. is one of the leading organizatations in its industry. Zimmer Biomet Holdings, Inc. maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Zimmer Biomet Holdings, Inc. to develop four types of strategies:

SO (strengths-opportunities) Strategies

WO (weaknesses-opportunities) Strategies

ST (strengths-threats) Strategies

WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Zimmer Biomet Holdings, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Zimmer Biomet Holdings, Inc. SWOT Analysis

As one of the leading companies in its industry, Zimmer Biomet Holdings, Inc. has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Zimmer Biomet Holdings, Inc. are –

Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

Successful track record of developing new products – product innovation.

Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.

Highly successful at Go To Market strategies for its products.

Strong distribution network – Over the years Zimmer Biomet Holdings, Inc. has built a reliable distribution network that can reach majority of its potential market.

Good Returns on Capital Expenditure – Zimmer Biomet Holdings, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Automation of activities brought consistency of quality to Zimmer Biomet Holdings, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.

High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Weakness of Zimmer Biomet Holdings, Inc. – Internal Strategic Factors

Weakness are the areas where Zimmer Biomet Holdings, Inc. can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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Not highly successful at integrating firms with different work culture. As mentioned earlier even though Zimmer Biomet Holdings, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Zimmer Biomet Holdings, Inc. needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.

There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.

Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Zimmer Biomet Holdings, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Zimmer Biomet Holdings, Inc.

New trends in the consumer behavior can open up new market for the Zimmer Biomet Holdings, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Government green drive also opens an opportunity for procurement of Zimmer Biomet Holdings, Inc. products by the state as well as federal government contractors.

The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Zimmer Biomet Holdings, Inc. to increase its profitability.

New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Zimmer Biomet Holdings, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Zimmer Biomet Holdings, Inc. to drive home its advantage in new technology and gain market share in the new product category.

Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.

The market development will lead to dilution of competitor’s advantage and enable Zimmer Biomet Holdings, Inc. to increase its competitiveness compare to the other competitors.

Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Zimmer Biomet Holdings, Inc. in those markets.

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Zimmer Biomet Holdings, Inc.

No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.

Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.

Limitations of SWOT Analysis for Zimmer Biomet Holdings, Inc.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the
major limitations of SWOT analysis
. For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.

SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.

The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Zimmer Biomet Holdings, Inc.

SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.

SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Zimmer Biomet Holdings, Inc.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Zimmer Biomet Holdings, Inc. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Zimmer Biomet Holdings, Inc.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.